Second Mortgages in Ajax Help Homeowners Raise Capital

Taking out a second mortgage means getting another loan in addition to your original mortgage and using your house as collateral. it is important to consider the financial implications of the new loan and to understand exactly what you are getting yourself into as your home is on the line when taking out a second mortgage in Ajax.

What is a Second Mortgage?

Second mortgages can be used to fund a variety of projects and goals for Ajax homeowners. A second mortgage is simply another mortgage on your home – a loan secured against the property. The term "second” means that the loan does not have priority on your home in case you default. Instead, your first mortgage – the loan used to purchase your home, has priority and that loan would be paid off before any funds go towards the second mortgage.
Some of the most common reasons Ajax homeowners take out second mortgages include:
  • Home improvements;
  • Purchasing additional homes;
  • Educational or emergency expenses;
  • Creating a home equity line of credit.
  • Consolidate debts
A second mortgage is a good way of financing when the homeowner has available equity in the property.

Advantages and Disadvantages

There are many benefits in obtaining second mortgages. One of the most popular and advantageous reasons behind second mortgages is to consolidate debt. If you find yourself overwhelmed by your credit card debt, car loans or other high interest debt, you can consolidate these different accounts and pay them off using the second mortgage loan. In this scenario you would pay off your high interest loans with your new, larger, low interest second mortgage loan. This results in lower monthly payments, lower interest rates and will save you a lot of money in the long-term.
Another great use of a second mortgage is to renovate or improve your home. In doing so, you can increase the value of your home and actually gain more equity.
Second mortgages can be useful and are more attractive than personal loans because of the lower interest rates, although they do carry some risk. There are a few situations where taking one out might be a bad idea, one of which is if you are just managing to pay your first mortgage.

Work with a Mortgage Lender in Ajax

Second mortgage rates tend to be a little higher than first mortgage rates and it’s a good idea to work with a mortgage lender who will find you the best possible second mortgage rate available in the market.
The amount available to homeowners for second mortgages depends on the equity they have in their house, credit score and loan-to-value ratio – the percentage of the property that is mortgaged. Home equity is the value of your home minus all the debts you have against your home.
Many Ajax homeowners use a second mortgage to help achieve their financial goals. Explore second mortgages in Ajax with a reputable lender and start saving now.
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Interested in learning more about the second mortgage options available to you in the Ajax area? Contact the Canadalend team today for more details.


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